Ericsson CEO: We're going to stick with ST-Ericsson joint venture
LAS VEGAS--Ericsson (NASDAQ:ERIC) CEO Hans Vestberg said the company remains committed to ST-Ericsson, its joint venture with STMicroelectronics, despite having recently announced plans to shed its investment in its handset joint venture with Sony.
"There was a time when it was extremely important to have a handset," explained Vestberg during a press roundtable here at the Consumer Electronics Show. He said in the past network infrastructure companies needed a handset play to be able to provide to wireless carriers an end-to-end solution. However, due to the rapid evolution of the handset market and the uncoupling of handsets from network suppliers, that need is no longer present, he said.
However, the situation is different in chipsets for wireless phones, Vestberg said. "What is inside ... is still very important."
He added that it remains important for Ericsson to be involved in the creation of silicon for wireless phones due to the complex interactions between wireless networks (which Ericsson makes) and wireless chipsets (which ST-Ericsson makes). Vestberg said Ericsson will support its investment in ST-Ericsson "for a while," without being more specific.
ST-Ericsson was created by the merger of Ericsson's chipset business with STMicroelectronics in 2009. ST-Ericsson counts Nokia and other as customers.
Sony announced in October it would buy Ericsson's 50 percent stake in Sony Ericson for $1.47 billion.
In other Ericsson news, the company announced its Chief Intellectual Property Officer Kasim Alfalahi will report directly to Vestberg. The changeup is part of Ericsson's previously announced intention to more effectively monetize its patent portfolio.
Ericsson led a coalition of companies that paid $4.5 billion for Nortel Networks' patent portfolio. Vestberg said that investment was notable in that Nortel's patents hadn't yet been licensed. He declined to discuss whether Ericsson would purchase InterDigital, which has said it is exploring strategic options that could involve the sale of the company.
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